Friday, September 28, 2007

Another ESOP tale, from a business perspective

You may feel at this point that you know everything you need to know about ESOPs, but here's another story in the news. In part:

The ESOP concept was developed in the 1950s by lawyer and investment banker Louis Kelso, who argued that the capitalist system would be stronger if all workers, not just a few stockholders, could share in owning capital-producing assets. ... The study found that ESOP companies perform better than their pre-ESOP performance would have predicted and also are more likely to remain in business. Moreover, ESOP companies have other retirement-oriented benefit plans more often than comparable non-ESOP companies.
One unnamed employee is quoted as saying "I own a piece of this company — that allows me to make it a better place to work.” He/she must have a voice in the company.(end of post)

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